Key Highlights
- Micron (MU) shares climbed 1.4% during premarket hours Monday, extending year-to-date gains beyond 200%
- Reports indicate Apple conducted testing of memory components from Chinese manufacturer ChangXin Memory Technologies (CXMT) for China-market devices
- Citi analysts reaffirmed Buy rating while reducing price objective from $1,400 to $1,150 due to moderating memory pricing trends
- Trivariate Research’s Adam Parker suggests Micron shares could potentially double before the memory cycle concludes
- Wall Street consensus projects Micron earnings at $31.29 per share for the upcoming quarterly report, anticipated September 22
Shares of Micron (MU) advanced 1.4% in premarket activity Monday, reaching $883.96, showing resilience despite emerging reports that Apple has conducted evaluations of memory chips manufactured by Chinese firm ChangXin Memory Technologies (CXMT).
According to a Sunday report from The Wall Street Journal, Apple engaged in preliminary discussions with CXMT regarding the potential supply of memory components for products destined for the Chinese market, with the tech giant seeking authorization from the Trump administration to move forward with the partnership.
CXMT recently completed its Chinese listing and has demonstrated rapid advancement in traditional DRAM technology. The company captured 7% of worldwide market share by revenue during the second quarter, based on data from Counterpoint Research.
Nevertheless, American manufacturers must obtain governmental clearance to purchase CXMT-manufactured memory products. Additionally, the Chinese chipmaker prioritizes its domestic client base, which constrains the near-term competitive threat to Micron’s operations.
The more significant long-term challenge for Micron centers on whether CXMT will eventually advance into high-bandwidth memory (HBM) production, the specialized chip category essential for AI server infrastructure. According to SemiAnalysis projections, CXMT’s portion of worldwide HBM wafer production capacity will expand from 1% in 2025 to 12% by 2028.
Shares of South Korean competitor SK Hynix ADRs also posted gains of 0.6% during early Monday trading.
Citi Adjusts Valuation Target
On August 7, Citi’s Atif Malik maintained his Buy recommendation on Micron while adjusting his price objective downward to $1,150 from the previous $1,400 target.
The firm reduced its valuation multiple and lowered profit projections for fiscal years 2027 and 2028. Citi anticipates continued appreciation in DRAM and NAND pricing, though at a decelerating rate, with memory prices reaching their zenith around the second quarter of next year.
The investment bank identified expanding Chinese memory manufacturing capacity as the primary long-term challenge, noting that increased supply from China could diminish Micron’s pricing leverage in markets beyond the United States.
Parker Projects Potential Doubling
Adam Parker, CEO of Trivariate Research, shared with CNBC on Friday that Micron’s valuation could potentially double before the present memory cycle reaches completion.
Parker contends that market participants may be overestimating earnings decline following the eventual peak. He believes the market concentrates excessively on Micron’s profit and loss statement while undervaluing its strengthening balance sheet, elevated gross margins, and substantial free cash flow generation capacity.
Parker did acknowledge that investors should diversify their holdings across a wider range of AI semiconductor investments considering ongoing volatility within the sector.
Micron currently trades at a price-to-earnings multiple of approximately 19.8.
Wall Street consensus estimates call for earnings of $31.29 per share for the September quarter, representing a significant increase from $3.03 in the prior-year period. Revenue projections stand at $50.82 billion, contrasted with $11.31 billion during the comparable year-ago quarter.
The company’s next quarterly earnings announcement is scheduled for approximately September 22, 2026.
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